Case No. 03-15331-SSMUnited States Bankruptcy Court, E.D. Virginia.
April 6, 2004
Reniece L. W. Kabando, Manassas, VA, for Debtor pro se
Eric D. White, Esquire, Samuel I. White, P.C., Richmond, VA, of Counsel for Countrywide Home Loans, Inc.
MEMORANDUM OPINION AND ORDER
STEPHEN MITCHELL, Bankruptcy Judge
Before the court is a pleading entitled “Response” filed by the debtor asking the court to vacate the order granting Countrywide Home Loans, Inc. (“Countrywide”) relief from the automatic stay in order to enforce a deed of trust against the debtor’s residence. Upon review of the motion, the court determines that a hearing is not required. Because the motion does not set forth any grounds that would justify vacating the relief from stay order, the motion will be denied.
Background
Reniece L. W. Kabando filed a voluntary petition for an adjustment of debts under chapter 13 of the Bankruptcy Code in this court on November 23, 2003. This was the
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debtor’s fourth bankruptcy filing in a twenty-four month period.[1] A plan was not confirmed, and the case was converted to chapter 7 on December 15, 2003. Approximately a month later, Countrywide filed a motion for relief from the automatic stay to enforce a deed of trust against the debtor’s residence located at 5573 Assateague Place, Manassas, Virginia. The motion alleged that the note secured by the deed of trust was 28 months in arrears and that the amount due on the note was approximately $233,700.00. The chapter 7 trustee filed a response opposing relief because the meeting of creditors had not yet been held, and the trustee needed an opportunity to investigate the value of the property.[2] The debtor filed a response stating that the debtor had “no objections” to the trustee’s request. The debtor’s response did not deny the arrearage or otherwise take issue with the factual averments of the motion.
At the scheduled preliminary hearing held on February 4, 2004, neither the trustee nor the debtor appeared. Counsel for Countrywide represented that he had spoken with counsel for the trustee and was advised that the trustee no longer objected to relief from the stay. Based on that representation and on the unrebutted allegations in the motion for relief
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from the stay, the court granted the motion, and an order was entered on February 18, 2004, terminating the automatic stay. In the interim, the debtor had filed a notice of appeal from the order but did not pay the filing fee. The record on appeal was transmitted to the United States District Court for the Eastern District of Virginia on March 10, 2004.[3] No stay pending appeal has been requested or granted. The present motion was filed on April 1, 2004.
Discussion
A motion seeking relief from a final order or judgment, and filed more than ten days after entry of the order or judgment in question, is properly considered under Rule 9024 of the Federal Rules of Bankruptcy Procedure. Rule 9024 incorporates, with certain exceptions not relevant here, Rule 60 of the Federal Rules of Civil Procedure. Rule 60 in turn allows a court
[o]n motion and upon such terms as are just, [to] relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
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(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
Fed.R.Civ.P. 60(b). In general, a party seeking relief from a judgment under Rule 60 must make a threshold showing of “timeliness, a meritorious defense, a lack of unfair prejudice to the opposing party, and exceptional circumstances.” Dowell v. State Farm Casualty Automobile Ins. Co., 993 F.2d 46, 48 (4th Cir. 1993).
The fact that an appeal has been taken from the order does not necessarily divest this court of jurisdiction to entertain the present motion. The Fourth Circuit has held that a lower court retains limited jurisdiction to entertain a Rule 60 motion even when the underlying judgment is on appeal. Fobian v. Storage Technology Corp., 164 F.3d 887 (4th Cir. 1999). If the lower court determines that the motion is meritless, it may deny the motion forthwith. Id. On the other hand, if the lower court is inclined to grant the motion, it may issue a short memorandum so stating, and the movant may then request a limited remand from the appellate court for that purpose. Id.
In the present case, the motion sets forth absolutely no facts that would suggest either a meritorious defense to the underlying motion for relief from the automatic stay or exceptional circumstances. Nor does the motion allege any facts suggesting that relief was obtained by fraud or that the court lacked either subject-matter jurisdiction or jurisdiction over the debtor. The motion states only that “counsel was not present” at the February 4,
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2004 hearing. It is true that debtor’s petition was filed pro se and that the debtor has not been represented by counsel, either in this case or any of the three prior cases. It is also undoubtedly true that debtors not represented by counsel may be at a disadvantage in connection with relief from stay motions since they may not be aware of possible defenses or how to present them effectively. However, more is required for relief under Rule 60 than the lack of legal representation. At a minimum, there must be some showing of a diligent effort on the debtor’s part to obtain the assistance of counsel and some facts suggestive of an underlying meritorious defense that counsel, if obtained, might have developed and presented. The court has reviewed the schedules and pleadings in this case and can discern no such possible defense. This is not a reorganization case, and the trustee is not seeking to administer the property for the benefit of creditors. It is uncontradicted that the payments on the deed of trust are seriously in arrears. No reason is suggested why the secured creditor should not be entitled to enforce its rights under nonbankruptcy law or why relief from the automatic stay was improvident.
ORDER
For the foregoing reasons, it is
ORDERED:
1. The “Response” filed by the debtor, which the court treats as a motion under Rule 9024, Federal Rules of Bankruptcy Procedure, for relief from the order of February 18, 2004, terminating the automatic stay, is denied.
2. The clerk shall mail a copy of this order, or give electronic notice of its entry, to the parties listed below.